With the changes in home care and the increased exposure to debt, some providers are choosing to include a clause which creates a chargeable interest in their home care client agreements. This gives the provider a right to lodge a caveat if they choose to do so.
Russell Kennedy has been receiving queries about some statements from client advocates suggesting that the use of these clauses is unlawful. With respect, this is incorrect and unfounded.
There is nothing unlawful about including a clause that allows you to lodge a caveat in a home care agreement. The purpose of a caveat is simply to protect a provider’s legitimate rights. There is nothing unfair or unconscionable about seeking to do so, nor are these clauses prohibited by the Aged Care Act 1997.
It is important to bear in mind that in most cases, providers will only seek to lodge a caveat where the client’s fees have fallen into arrears. While it is easier to avoid bad debts in home care than in residential care, there are situations in which a provider may be exposed to a risk of bad debt. Such a situation may include, for example, where a delayed income assessment results in a client being held to be eligible to pay an income-tested care fee and then deciding not to proceed with the package. At other times, a provider may continue to provide services despite accruing debts out of care and concern for the client where for example, their funds are being misappropriated by a family member.
There is nothing unlawful about a provider protecting themselves for these types of situations through the use of provisions such as a caveat. Russell Kennedy is not aware of any directive from the Department of Social Services that states that this is unlawful and we can see no basis in the legislation for claiming it is unlawful.